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A Match Made in Supply Chain Heaven: How to Increase Supplier Engagement

Kristin Manganello
1/27/2019 | 5 min read
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A Match Made in Supply Chain Heaven: How to Increase Supplier Engagement

The global supply chain is an unruly wilderness, rife with uncertainty and risk. From unpredictable natural disasters and cybersecurity nightmares to fluctuating compliance regulations and unreliable infrastructure, it seems as though unforeseen threats lie in wait around every corner, just waiting to disrupt companies and damage their shareholder value.

The supply chain landscape is vast, labyrinthine, and erratic, and it continues to expand and evolve. Due to its inherent complexity, entire links of the chain can become completely obfuscated if processes aren’t carefully monitored, leaving companies vulnerable to a range of obstacles and challenges. And unanticipated risks aren’t the only problem — lack of insight into the supply chain can stunt a company’s growth and wreak havoc on its bottom line.

To avoid or remedy this, many companies are looking to develop strategically engaged partnerships with key suppliers, expanding the collaborative aspect of these relationships. Not only can more collaborative, communicative relationships help to mitigate risk and quell uncertainty, they can also offer a range of unique benefits. In a recent research study, analytical consulting agency Gallup identified lower costs, better planning, enhanced supplier support and value, improved product development, and higher overall quality as a few key advantages.

8 Tips for Establishing Better Supplier Partnerships

Creating harmonious relationships with vital suppliers takes hard work and dedication, but nothing great is ever easy. When working toward this goal, companies should keep in mind the following goals:

1. Understanding that knowledge is power — To start building stronger partnerships with their suppliers, companies must first analyze their current procurement structure. By using tools such as the Higgs Index, for instance, businesses can collect valuable supplier information. And once the relevant data is gathered, companies should confer with both department heads and stakeholders to get everyone on the same page.

2. Making a game plan — Once the facts are gathered and there is consensus among all parties, the next step is to identify which suppliers to establish partnerships with. While it may be tempting to engage with every link in the supply chain, doing so is likely to become overwhelming and will ultimately be exceedingly difficult to maintain. By taking a strategic approach, companies are more likely to succeed in creating a strong bond with a few carefully chosen suppliers.

3. Looking inward — At the same time, companies should also focus on determining their core values and goals. Once these are established, they can guide in the creation of clear, actionable standards that can then be shared with suppliers. These standards will help suppliers better understand a company’s specific requirements.

4. Developing educational materials — These materials will be based on the core values and standards that were previously explored and developed. To ensure all standards are communicated as clearly and effectively as possible, this information should be laid out in a concise, intuitive manner.

5. Understanding supplier perspective — It’s important for companies to be aware of the kinds of challenges that their suppliers may face during supply chain processes. Suppliers may not completely understand what is being asked of them, or may lack the resources and technologies to complete the requests they are receiving. To deal with these challenges and better predict and mitigate any issues that may occur, companies must look at the situation from multiple angles.

6. Creating a strong foundation — A fully engaged supplier partnership is virtually impossible without a bedrock of support to anchor it. Companies should be ready to assist their suppliers with any questions or issues that arise. And if necessary, businesses should consider investing in a multilingual support person who can seamlessly communicate with suppliers in their native languages.

7. Forging a deeper connection — Having an open-door policy that gives suppliers the chance to ask questions and share concerns helps to strengthen the bond between company and supplier. Companies putting emotional intelligence skills to use stand to gain the most, bringing about a better understanding of how suppliers feel about the relationship as a whole — which can have a profound effect on the efficacy and success of the partnership.

8. Bringing about yin and yang — As these partnerships progress, they should ultimately be beneficial to both the company and the supplier. Companies should focus on continuing to nurture the relationship while ensuring that the partnership is helping the supplier become bigger and stronger.

Enhancing Engagement in Supplier Relationships

Building an engaged, sustainable supplier relationship is not all that different from building a functional marriage; a successful supplier partnership requires patience, understanding, emotional intelligence, and the willingness to collaborate in a meaningful way. In doing so, companies can unlock limitless potential that not only allows them to diminish risks and reduce uncertainties but also grow into a stronger, more efficient business.

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